In this simulation, you are asked questions about changes in accounting principle. Prepare responses to allparts.

KWW Professional Simulation Changes in Accounting Principle Time Romaining 1 hour 20 minutes Unsplit Spit Hioriz Spit Vertical Spreadsheet Calculator Exit Journal Entries Financial Statemanta Resources Directions Situation Garner Company began operations on January 1, 2010, and uses the average cost method of pricing inventory. Management is contemplating a change in inventory methods for 2013. The following information is available for the years 2010-2012. Net Income Computed Using LIFO Method FIFO Method Average Cost Method $20,000 24,000 27,000 $12,000 14,000 17,000 2010 2011 2012 $15,000 18,000 20,000 On January 1, 2012, Gamer issued 10-year, $200,000 face value, 6% bonds, at par. Each $1.000 bond is convertible into 30 shares of Garner common stock. The company has had 10,000 common shares outstanding throughout its life. None of the bonds have been exercised as of the end of 2013. (Ignore tax effects.) Journal Entries Financial Statementa Resources Situation Directions (a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2013. (b) Assume Garner Company used the LIFO method instead of the average cost method during the years 2010-2012. In 2013, Garner changed to the FIFO method. Prepare the journal entry necessary to record the change in accounting principle. Situation Journal Entries Financiai Statementa Resources Directions Assuming Garner had the accounting change described in (b) above, Garner's income in 2013 was $30,000. Compute basic and diluted eamings per share for Garner Company for 2013. Show how income and EPS will be reported for 2013 and 2012.